Tom De Mark pins us around a top here, still suggesting roughly a 5% retreat from here in total, in an up-down manner that frustrates bears, before the market then advances again. He makes the following analogy with 1987:
Source: De Mark / Bloomberg
My model top is around today, fitting with De Mark’s call, and my next model low is around 9 March, which fits with that 1987 analogy.
With a little more geomagnetism forecast, my model is flattening out. Ideally, I would like to see a final higher push today/tomorrow into which strength I would exit further stock indices longs, with a view to looking to buy some back if we can reach around 5% lower or so, but still being much more overweight in commodities expecting outperformance in that class going forward.
Turning to the US dollar, Chris Puplava identified this analogy with the 1970s in the middle of last year.
Source: PFS Group
Note how the US dollar failed a backtest of the ABC s/r line in the 1970s and then declined significantly, providing the backdrop to the last secular commodities bull finale.
The current US dollar technical position is very similar (shown below), possibly having just backtested the s/r line and potentially now going on to decline, as a backdrop to this secular commodities bull finale. Dollar sentiment is fairly neutral currently, giving no clues, but the Euro-USD relationship has closely mirrored pro-risk in recent years. As my other references support a bullish commodities conclusion over the next 12 months, I predict the US dollar will indeed fall away and the Euro advance again, as pro-risk led by commodities is the dominant theme. The Greek debt deal yesterday should assist in supporting Euro-USD.
Source: Stockcharts / James Craig